Tinkler sells out of Whitehaven

By Glenda Kwek

Nathan Tinkler will be out of Whitehaven by the end of today, after selling his stake to other investors.

Mr Tinkler sold about half his stake in Whitehaven Coal to US investment firm Farallon Funds for about $300 million, Whitehaven said in a statement to the ASX this morning.

Nathan Tinkler has halved his stake in Whitehaven.Credit:Rob Homer

A spokesman for the Tinkler Group said other investors, including hedge fund Noonday, had picked up or were picking up the rest of the former billionaire's 19 per cent stake in Whitehaven.

Advertisement

Mr Tinkler sold - through his Aston Resources Investments and Boardwalk Resources Investments - 101 million Whitehaven shares, or 9.91 per cent, to Farallon Funds.

The shares were sold at $2.96 each, according to a statement to the ASX this morning. That's a premium of nearly 40 per cent to yesterday's closing price of $2.11. The shares jumped 9 per cent to $2.30 in early trade this morning.

Wilson HTM senior resources analyst Andrew Pedler said the sale was a good move for the company.

''I think Tinkler has been unstable presence on the register. Reducing his holdings in an orderly manner is important,'' Mr Pedler said. ''It will not affect the operations of the company whatsoever. It will affect people's perceptions of its value.''

Farallon said in a statement that it "believes the current market price of Whitehaven shares does not reflect the value of the company".

"The Farallon Funds now have a sizeable investment in Whitehaven, and Farallon looks forward to growth in shareholder value over time."

Farallon also agreed to buy another 1.63 per cent, subject to regulatory approval, the fund said. It already holds a 5.1 per cent stake in the company.

Difficult' decision

The transaction means Mr Tinkler loses his place as the largest shareholder in Whitehaven, his last major listed investment. Closely held Tinkler Group held a 19.4 per cent stake in Whitehaven, according to an October statement.

Mr Tinkler said the decision to sell had been "difficult" but that the sale was in the best interests of all shareholders.

"While we are happy with the price we have received, being a 40 per cent premium to the current market price and a recent high for the company, we feel strongly that this still significantly undervalues the company's underlying asset base," he said in a statement.

Along with selling to Farallon, part of his stake had been sold to Noonday, a hedge fund, he said.

PhillipCapital’s senior resources analyst Lawrence Grech said the sale was an important first step, ‘‘but by no means the final step to the settlement of this perceived overhang from the Tinkler Group’’.

‘‘As Whitehaven’s operations become more efficient and they obtain permits to deliver an important development asset in Maules Creek, then we are going to see a lot more underlying interest in Whitehaven," Mr Grech said.

"That provides a lot more potential for an orderly selldown of Tinkler’s Group’s remaining parcel and more options for Farallon Group to hold or reduce to new portfolio or corporate investors seeking long-term growth in very good coal assets.’’

Blackwood said the payment could be made by any of the companies linked to Mr Tinkler, and any asset sales across Mr Tinkler's empire must be used to resolve the debts.

If Mr Tinkler fails to come up with the $12 million by June 30, a previous liquidation action will be resumed. The Blackwood liquidators applied on May 22 to freeze his assets, including the Whitehaven stake and a family trust managed by his wife.

The move, which took place in April according to Singapore company records, came less than two weeks after liquidators of his failed Australian company Mulsanne Resources said they were planning to take legal action against Mr Tinkler for insolvent trading.

Blackwood had forced Mulsanne into liquidation last year after Mulsanne failed to honour a deal to pay $28 million for a third of Blackwood.

Mr Tinkler, who was listed as Australia's richest person under 40 for several years running, and as recently as 2011, moved with his family to Singapore last year.

Loading

The 36-year-old electrician turned miner, who sold his house in 2006 to buy into a coal mine, made a $5.3 billion bid for Whitehaven last year, which collapsed in August as coal prices fell.

Mr Tinkler owed as much as $700 million to his backers including Farallon, Credit Suisse and Kuok Group and missed a $200 million payment in October, people familiar with the matter said in November.